SBI Economists Predict Temporary Dip in India's GDP Growth

SBI economists forecast a slowdown in India's GDP growth to 6.5% in Q2 of FY25, attributing it to incipient pressures on the domestic economy. While growth hit a 15-quarter low, a rebound is expected. Rural demand is strong, but urban challenges persist due to regulatory hurdles in unsecured lending.

Economists from SBI, India's largest lender, are projecting a further deceleration in GDP growth to 6.5% for Q2 of the fiscal year, prompting concerns about the country's economic momentum.

Although the real GDP growth in April-June stood at 6.7%, economists claim signs of weakening demand are evident in agriculture, industry, and service sectors. Despite this, SBI suggests this downturn is only temporary, anticipating growth resurgence driven by increasing rural demand.

Challenges persist in the urban sector, where regulatory tightening on unsecured loans is dampening recovery. SBI advises vigilance against financial policy missteps that could disturb economic stability.

(With inputs from agencies.)